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www.freedomandprosperity.org |
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The views expressed by Andrew Quinlan and Dan Mitchell on this weblog are solely their own and are not necessarily those of their employers, The Center for Freedom and Prosperity Foundation and The Heritage Foundation, respectively. |
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The Market Center Blog |
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Observations and insights on the global fight |
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CF&P's Market Center Blog Archives |
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Wednesday, June 30, 2004 ~ 5:30 p.m., Dan Mitchell Wrote: As Americans celebrate their freedom on Sunday, it will be with a certain irony: Not all Americans have the freedom to celebrate the holiday with the traditional festive bang.
Though about 70 million of us live in states that allow all sorts of fireworks and firecracker use, 50 million other Americans who live in nine states, including New York and Arkansas, need a permit to even
light a sparkler. ...Safety is the major concern of those who ban our celebratory backyard light and noise shows, but their fears are overblown. ...It is hard to see much of a relationship over the years between
fireworks use and deaths. Though almost exactly the same number of people died in 1990 and 2002, fireworks use grew almost every year, soaring from 68 million pounds of explosives used to 221 million pounds.
States such as New Jersey that have adopted more stringent regulations or bans haven't seen significant drops in the number of fireworks-related deaths, in part because there were few such deaths to begin with.
During the last three years, states with bans actually had a higher fireworks-related death rate (.018 per million people) than the states without restrictions (.014 per million). ...Government can protect
people from only so much, and if we banned all the products that caused more deaths and injuries than fireworks, there would be virtually nothing left to use. After all, what is the Fourth of July celebrating if
we criminalize even the tiny risks associated with fireworks?
Wednesday, June 30, 2004 ~ 4:15 p.m., Dan Mitchell Wrote: What can the West do to help? The worst thing is more foreign aid. For the most part, foreign aid is government to government, and as such, it
provides the financial resources that allow Africa's corrupt regimes to buy military equipment, pay off cronies and continue to oppress their
people. It also provides resources for the leaders to set up "retirement" accounts in Swiss banks. Even so-called humanitarian aid in the form of
food is often diverted. Blundell reports that Mugabe's thugs rip labels off of wheat and corn shipments from the United States and Europe and re-label them as benevolence from the dictator. Most of what Africa
needs the West cannot give, and that's the rule of law, private property rights, an independent judiciary and limited government.
Wednesday, June 30, 2004 ~ 10:37 a.m., Dan Mitchell Wrote: ...the offer made me think about what a school of journalism ought to be teaching people whose jobs will be to inform the public. They first
and foremost ought to know what they are talking about, which requires a solid grounding in history, statistics, science -- and economics. Since journalists are reporting on so many things with
economic implications, they should have at least a year of introductory economics. People with a basic knowledge of economics would
understand that words like "surplus" and "shortage" imply another word that may not be mentioned explicitly: Price. And chronic surpluses or chronic shortages imply price controls.
Wednesday, June 30, 2004 ~ 9:57 a.m., Dan Mitchell Wrote: It is unfortunate that at the start of the 21st century, Europe and North America form two separate trading blocs. The Bush administration
could rectify that situation by declaring that, in principle, the North American Free Trade Agreement could expand to include interested Europeans, thus transforming NAFTA into a North Atlantic Free Trade
Agreement. The new bloc could offer many benefits, including improved market access for exports from Europe and North America, increased economic efficiency and greater global economic stability. It could
thwart the plans of those in Europe who want to pursue a policy of economic centralization and unify the Continent around anti-Americanism. In short, for the U.S. and much of Europe, it could be
a winning strategy.
Wednesday, June 30, 2004 ~ 8:46 a.m., Dan Mitchell Wrote: ...neither actual nor projected budget deficits raise real or nominal interest rates, steepen the yield curve, reduce national savings, cause
trade deficits, or make the dollar go down or up. The logic behind such speculations is flawed and the evidence is missing. These issues are important because numerous pundits and policymakers are arguing that
taxes should be raised to reduce deficits. Indeed, a theme of Rubin, Orszag, and Sinai is that higher tax rates can improve economic growth, but that runs directly counter to serious research on the causes
of economic growth. Research on economic growth assigns importance to the tax structure, marginal tax rates, and the level and composition of government spending, but not to whether spending is financed by
taxes or deficits. Deficits are a sign that federal spending is too high, but deficits do not cause many of the economic harms that some analysts are claiming.
Wednesday, June 30, 2004 ~ 7:19 a.m., Dan Mitchell Wrote: Headlining an appearance with other Democratic women senators on behalf of Sen. Barbara Boxer, who is up for re-election this year, Hillary
Clinton told several hundred supporters -- some of whom had ponied up as much as $10,000 to attend -- to expect to lose some of the tax cuts passed by President Bush if Democrats win the White House and control
of Congress. "Many of you are well enough off that ... the tax cuts may have helped you," Sen. Clinton said. "We're saying that for America to
get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good."
Tuesday, June 29, 2004 ~ 10:49 p.m, Dan Mitchell Wrote: The Liberals, who have gone from a 168-seat majority in the 308-seat House of Commons to a plurality of about 135 seats, will almost
certainly form a coalition with the socialist New Democratic Party (NDP) to rule Canada. The NDP peddles a watered-down form of socialism that's heavy on interest-group politics but moderate overall:
The party has few major spending plans, and even proposes some tax cuts. But the NDP is dead set on taking away Canadians' guns and even reducing gun freedoms in the U.S. "We're proposing going across the
border to the U.S. and actively engaging in lobbying to have gun-control laws in the U.S. strengthened," NDP leader Jack Layton explained at a May campaign rally in Winnipeg. And, given that the
Liberals will almost certainly have to deal with him to join a government, more gun control - which imposes reasonably few monetary burdens - may well become reality. ...In addition to being
awfully arrogant, this plan is ironic, since more crime probably flows from Canada to the U.S. than vice versa: The nation has an overall crime rate half again higher than the United States'. Toronto, once the
safest large city in North America, now has more muggings, car thefts, and violent assaults per capita than New York City. All of Canada's major provinces would rank among the 20 most dangerous American
states. Since American crime rates peaked in the early 1990s, crime has fallen in 48 American states and over 80 percent of America's major
cities. Meanwhile, it has risen in six of Canada's ten major providences and seven of its ten largest cities. The reasons for this divide are
complex, but it's notable that the United States imprisons wrongdoers at about five times Canada's rate and has about a quarter more police on a per-capita basis. Canada, meanwhile, can boast only of a national
gun-registration database that cost 1,000 times more than originally projected.
Tuesday, June 29, 2004 ~ 3:51 p.m., Dan Mitchell Wrote: The outgoing head of the socialist group in the European Parliament, Enrique Baron Crespo, has launched a scathing attack on Portuguese
prime minister José Manuel Durão Barroso, who is expected today to be confirmed as the next President of the European Commission. In an interview with French daily Le Monde, Mr Crespo derides Mr Durão
Barroso as "neither sufficiently European, nor sufficiently social". ..."In terms of economics, [he] has proved his conservatism in his country
and is very right-wing, concerning himself only with competitiveness. ...For me, as a Spanish socialist, this is something I cannot accept".
Tuesday, June 29, 2004 ~ 2:29 p.m., Andrew Quinlan Wrote: The minimum wage is like a tax on small businesses that reduces their ability to hire and raise wages. According to the [Small Business
Administration], there was slower wage growth among low-wage workers in small firms during times when the minimum wage was rising. Even among large firms, the probability of a low-wage worker being
unemployed doubled after the minimum wage was increased. ...minimum wage jobs are not unimportant jobs. They are the first rung on the employment ladder for most workers. The experience they gain in
such simple areas as showing up for work on time, and learning to follow instructions and how to interact appropriately with customers, clients and patients are critical to success in life. That is why wage
growth among those hired in a minimum wage job is very high for those who stick with it. ...90 percent of workers hired at the minimum wage are earning more than the minimum after one year.
Tuesday, June 29, 2004 ~ 1:42 p.m., Dan Mitchell Wrote: Minister for Finance Charlie McCreevy last week declared that Irelands recent economic prosperity was due to a policy of low taxation. ..."Our
low-tax strategy has paid huge dividends and is, I am certain, strongly supported by the Irish people, as evidenced by the results of the last general election when the economy and its management were central
campaign issues," noted McCreevy. ...low tax policies have the overwhelming support of the populace, citing an opinion poll taken last autumn in which only 9% of respondents favoured raising taxes to
tackle the budget deficit.
Tuesday, June 29, 2004 ~ 10:23 a.m., Dan Mitchell Wrote: Last week a San Francisco federal judge ruled that a lawsuit by a handful of Wal-Mart female employees should be transformed into a
massive class-action case on behalf of 1.6 million women who worked at Wal-Mart over the last eight years. In rendering his decision, Judge
Martin Jenkins called the case "historic." But critics of our civil justice system wouldn't call the case "historic" so much as sadly typical of the
current state of U.S. employment law. The suit is based on individual cases that reveal little more than the frustrated ambitions of underperforming or unpopular workers, backed up by dubious
statistical analysis and tortured logic that binds together contradictory arguments by the thinnest of threads. ...Incredibly, the plaintiffs' lawyers
even quote disapprovingly a Wal-Mart store manager who says he relies on "teamwork, ethics, integrity, and the ability to get along with others"
in making promotions. "Such unwritten, subjective criteria," the lawsuit states, "are particularly vulnerable to the influence of stereotypes." Of
course, only in the moral netherworld that many plaintiffs' attorneys inhabit these days would "ethics" and "integrity" be considered
"subjective" criteria to be avoided in making hiring or promotions. ...That the case against Wal-Mart is so flimsy isn't surprising. Since it
became the largest company in America, Wal-Mart has also emerged as the most-sued company. Trial lawyers have set their sights on Wal-Mart's deep pockets and are aided by the numerous unions and
left-wing advocacy groups, whose barrage of negative publicity about the company aims to force it to unionize and to soften up public opinion for a big payoff in court in cases like this.
Tuesday, June 29, 2004 ~ 9:49 a.m., Dan Mitchell Wrote: If students receive grants or subsidized loans covering much of the cost of attending school, they become far less sensitive to tuition increases.
The discipline of the market is not strong. In a free, unsubsidized market, consumers are sensitive to rising costs, and entrepreneurs seek to cut costs and lower prices to lure new customers away from others.
But higher education does not work that way in America today. ...In many ways, higher education resembles health care: third parties (e.g., governments, insurance companies, foundations) pay most of the bills,
making consumers relatively indifferent to the price of services. ...The evidence shows that very little increased government support given state universities over the past generation has actually gone toward
instruction. Moreover, the evidence shows that lavishing more state funds for higher education does not have much effect on the number of kids going on for college degrees. ...state university presidents claim
that supporting higher education is investing in human capital and that human capital is vital for economic growth. Yet the empirical evidence suggests that, other factors held equal, the more state governments
support higher education, the lower the rate of economic growth. Why? When government support for colleges grows, it forces higher taxation
on private sector activity that, on average, is produced more efficiently than university activity. Money is shifted from highly productive to less
productive uses. Also, much increased public support for universities does not go to expand learning or student access, but to provide higher
incomes and lighter work loads for university staff. ...A good case can be made that governments should largely get out of the higher education business, ending state subsidies and tax advantages for
private donations. Moreover, the evidence is strong that massive governmental infusions of funds, along with tax-sheltered private contributions, have contributed to the cost explosion in higher education.
Monday, June 28, 2004 ~ 5:17 p.m., Dan Mitchell Wrote: Unemployment is the biggest source of worry for Europeans, according to a new survey published today (22 June) by the GfK market research
group. People in eight countries (the UK, Germany, France, Spain, Poland, Italy, the Netherlands, Austria) were asked what was their biggest source of concern. Just under half of all those surveyed
responded that unemployment worried them the most. And the fear of losing jobs was the top concern in all but two countries (the UK and the Netherlands). ...In Germany - where unemployment is over four million -
77 percent of people asked said this was their main worry in life.
Monday, June 28, 2004 ~ 3:59 p.m., Dan Mitchell Wrote: There were 12,274,368 in the Voting Age Population of 205,815,000 missing from the 2000 presidential election, because of abortions from
1973-82. ...Look inside these numbers at where the political impact is felt most. Do Democrats realize that millions of Missing Voters--due to
the abortion policies they advocate--gave George W. Bush the margin of victory in 2000? ...There are 19,748,000 Democrats who are not with us today. (49.37 percent of 40 million). There are 13,900,000 Republican
who are not with us today. (34.75 percent of 40 million). By comparison, then, the Democrats have lost 5,848,000 more voters than the Republicans have. ...Missing Voters--through decisions made in the
1970s and early 1980s, encouraged and emboldened by the feminist movement at the height of its power--altered the outcome of the U.S. presidency a generation later, in a way proponents of legal abortion
could not have imagined.
Monday, June 28, 2004 ~ 10:45 a.m., Dan Mitchell Wrote: ...higher tax rates reduce work time in the market sector, increase the size of the shadow economy, alter the industry mix of market activity,
and twist labor demand in a way that amplifies negative effects on market work and concentrates effects on the less skilled. ...Regressions on rich-country samples in the mid 1990s indicate that a unit standard
deviation tax rate difference of 12.8 percentage points leads to 122 fewer market work hours per adult per year, a drop of 4.9 percentage points in the employment-population ratio, and a rise in the shadow
economy equal to 3.8 percent of GDP.
Monday, June 28, 2004 ~ 10:19 a.m., Dan Mitchell Wrote: As for an overall cost estimate, W. Mark Crain of George Mason University and Thomas D. Hopkins of the Rochester Institute of
Technology prepared an estimate of regulatory costs for 2000 for the Small Business Administration. Their report assessed social and environmental costs as well as costs of economic regulations (such as
price and entry restrictions), "transfer" costs (such as farm price supports, which shift money from one pocket to another), and paperwork costs (such as tax compliance). It found 2000 regulatory
costs of $843 billion. (That estimate is largely in line with the inflation-adjusted $815 billion predicted for 2000 by Hopkins in a 1995 report for the Small Business Administration). Updating the Crain and
Hopkins 2000 regulatory costs for 2003 by extrapolating the growth in regulatory costs that had occurred between 1995 and 2000 yields an estimate of $869 billion.
Sunday, June 27, 2004 ~ 3:22 p.m., Dan Mitchell Wrote: The individual income tax burden on dividends was lowered sharply in 2003 from a maximum rate of 35% to 15%, creating a unique
opportunity to analyze the effects of dividend taxes on dividend payments by U.S. corporations. ...We find a sharp and widespread surge in dividend distributions following the tax cut, along several dimensions.
First, the fraction of publicly traded firms paying dividends began to increase precisely in 2003 after having declined continuously for more than two decades. Nearly 150 firms have initiated dividend payments
after the tax cut, adding more than $1.5 billion to aggregate quarterly dividends. Most of these firms initiated regular, recurrent payments rather than one-time special' distributions. Second, many firms that
were already paying dividends prior to the reform raised regular dividend payments significantly after the tax cut. ...All three of these effects are significant among all company sizes, and are robust to
controls for profits and other firm characteristics.
Sunday, June 27, 2004 ~ 1:00 p.m., Dan Mitchell Wrote: One idea suggested is to ban television commercials for "junk food" directed at kids. This chestnut first surfaced at the Federal Trade
Commission in the late 1970s. It didn't go anywhere then -- and it shouldn't go anywhere now. ...A ban would be ineffective because there is no reason to think that the ads kids see make them obese. Although
American children see thousands of food ads each year, they have done so for decades -- since long before the dramatic upswing in obesity. Today's kids actually watch less television than previous generations
and have many more commercial-free choices. Even our dogs and cats are fat, and it is not because they are watching too much advertising. ...Our First Amendment requires government to demonstrate that
restrictions on truthful, non-misleading commercial speech for legal products meaningfully advance a compelling interest. Because a children's advertising ban would be ineffective, it would fall far short of
that test.
Saturday, June 26, 2004 ~ 12:11 p.m., Dan Mitchell Wrote: Farmers in rich countries received $257.3bn (140.2bn) in financial support from taxpayers and consumers last year, amounting to 32 per
cent of their gross receipts... farmers in the US are still substantially less reliant on subsidies than their European counterparts; subsidies and
other transfers account for only 18 per cent of their gross receipts. ...
Friday, June 25, 2004 ~ 11:10 a.m., Dan Mitchell Wrote: As the offshore outsourcing debate continues to rage on, another group of companies has come in for severe criticism in the US: "expatriate"
services firms. Companies including Seagate Technology and Tyco have moved their headquarters from the US to offshore tax havens, and are
now being branded as "unpatriotic" by critics who say they are taking money from the hard-working US tax payer and possibly doing US IT
contractors out of a job. The anger being expressed by both state and government representatives is getting more and more fierce, as they attempt to expose the next case of unpatriotic villainy. ...In fact when
the argument focuses on "unpatriotic" acts and the lack of favoritism for local companies and workers, it really boils down to this - the US is
putting up barriers to stifle competition from overseas, and maintain the incumbent status quo.
Friday, June 25, 2004 ~ 10:54 a.m., Dan Mitchell Wrote: In an interview with the New Statesman, quoted by the Independent, Trade and Industry Secretary Patricia Hewitt said that a no vote could
put Britain on the road to withdrawal from the EU. "We will be in uncharted territory. It would have the effect, and would be intended to
have the effect, of putting Britain on the margins, and probably on the road to withdrawal". ...Ms Hewitt's remarks, however, have led to
criticism. She has been accused of scare tactics by the shadow Foreign Secretary Michael Ancram, the Independent reported.
Friday, June 25, 2004 ~ 10:16 a.m., Dan Mitchell Wrote: ...voters would do themselves, and the European Union, a great service if they were to reject this treaty and jolt governments into coming up
with a better version. Some European politicians and EU devotees have argued that the consequences of a rejection would be catastrophic. That is hyperbole. ...the treaty does bring some real improvements to the
EU-for governments. For the people they serve, however, it does not. ...the point of a constitution, or even of a constitutional treaty, as many
European leaders now prefer to call it, is not simply to make the process of government easier. In some ways, just the reverse: it is to make sure
that government happens under clear rules and constraints, so that it is hard for it to act and evolve in ways that citizens find unacceptable. Otherwise, effectiveness may be achieved at the expense of popular
legitimacy and, ultimately, provoke a backlash. That is where Europe's new constitution fails. ...But if voters are to feel comfortable both with
that efficiency and that enlargement, they need a constitution that stabilises and controls the process properly. Such a constitution plainly
cannot be achieved just by inter-governmental negotiations. It needs to be demanded by voters. That is why the best result in all the ten referendums would be a resounding no vote.
Friday, June 25, 2004 ~ 8:27 a.m., Dan Mitchell Wrote: The last remaining right - the attorney-client privilege - is under full-scale assault by DOJ prosecutors in the tax shelter case involving
the accounting firm KPMG. ...In recent years, the DOJ has taken the position that winning its cases is more important than historic rights centuries in the making. ...Americans need to think seriously about the
quality of "justice" that is coming from the Justice Department. Prosecutors have defined "cooperation" as aid in convicting oneself or
a fellow employee, as waiving all constitutional rights and privileges, as betrayal of fellow employees and as helping prosecutors create the appearance of guilt even when no crime has been committed. ...What we
are witnessing is the emergence of a fascist legal order in which law and legal procedure are whatever unelected officials decide serves the interest of government. How else can we explain how the four
foundations of our legal system - no retroactive law, no crime without intent, no self-incrimination and the attorney-client privilege - have been swept aside in the federal case against KPMG?
Thursday, June 24, 2004 ~ 3:35 p.m., Dan Mitchell Wrote: It's been called the Detroit of Europe, even though the Hong Kong of Europe might be more appropriate. Recently Deutsche Welle labeled
Slovakia "A Monaco on the Danube". Even more importantly, it's not out of the question that soon we will hear about the Slovakias of Africa
or South America. ...With a flat rate of 19 percent, Slovakia leads the European low tax competition, something that naturally infuriates
socialists in the rest of the union, but makes foreign investors laugh all the way to the bank. Recently, south Korean car and appliance maker Hyundai chose Slovakia for a giant car manufacturing plant, joining
earlier carmakers such as Volkswagen and Porsche and instantly giving the country the nickname the Detroit of Europe. ...Evans, today president of the Center for the New Europe in Brussels, recently
revisited Slovakia and came back most enthusiastic. Says Evans: "The Slovak economy is doing well. Growth is well over 4 percent and unemployment is coming down steadily. Whilst the traditional liberal
centers such as Bratislava are doing very well, wealth creation is also clearly permeating the villages and rural areas. With its low flat tax and
booming manufacturing and service sectors, Slovakia is justified in its reputation of being the new Hong Kong of Europe."
Thursday, June 24, 2004 ~ 2:27 p.m., Andrew Quinlan Wrote: John Kerry says he wants to raise the minimum wage to $7 an hour from $5.15, and his proposal has us thinking: Why stop there? Why not
$10 an hour, or $20, or for that matter whatever a U.S. Senator makes? ...wage floors aren't manna from heaven. Here on Earth, they tend to price certain kinds of labor out of the job market. Businesses hire and
pay workers what they think their skills are worth relative to other ways they can spend their capital. Force the price of labor too high, and
suddenly businesses hire fewer workers, especially those at the lower rungs of the skill ladder. ...Bill Clinton's Small Business Administration followed a group of workers after the last increase in the minimum
wage, in 1997, and found it slowed wage growth at small businesses and more than doubled the likelihood that low-wage workers at large firms would be unemployed.
Thursday, June 24, 2004 ~ 11:06 a.m., Dan Mitchell Wrote: [T]he "CHOICE" Act [will] allow individuals to avoid unnecessary regulatory costs by purchasing health insurance from whatever state
they wish. The result would be more affordable health insurance for everyone and fewer uninsured. ...Five different states require consumers to buy coverage for wigs. Yes, wigs. Other types of required coverage
include alcoholism (45 states) and infertility treatment (14 states), contraceptives (25 states), acupuncturists (10 states), marriage therapists (14 states), massage therapists (2 states), and osteopaths (21
states). States have passed over 1,500 laws mandating that health-insurance purchasers (individuals and employers) buy particular types of coverage they may or may not want, usually at the behest of
those who provide the covered service. Studies have found these mandates increase the cost of coverage by 15-30 percent, and prevent up to 25 percent of the uninsured from purchasing insurance. The
situation is so bad that a few years ago Vermont Gov. Howard Dean (D) — who never met a big-government idea he didn't like — begged Vermont's legislature to stop enacting mandates because they were
making coverage too expensive. Currently, only very large employers can avoid these regulatory costs. Everyone else must pay up, go without health insurance, or move to another state. The CHOICE Act would
change all that by allowing any willing consumer to buy coverage from any willing insurer, nationwide.
Thursday, June 24, 2004 ~ 10:47 a.m., Dan Mitchell Wrote: Research conducted by accounting firm KPMG has found that one third of private banking institutions are planning acquisitions in the next
three years, with the Asia Pacific region identified as a particular hot spot. According to KPMG, the Asia-Pacific region accounted for 41% of all private banking acquisitions in 2003 (by volume). This compares
with a figure of 23% in 2000 and is a trend the firm forecasts is set to continue, with the research suggesting that private banks around the
world see Asia-Pacific as being the most noteworthy market in terms of growth potential. ...Commenting on the findings, Rupert Chamberlain,
Director, KPMG Transaction Services, noted: "When asked to identify the most noteworthy markets in terms of growth potential, private bankers pointed clearly towards Asia-Pacific, citing a combination of
regulatory requirements in Europe and North America, the changing European tax and legal environment...
Thursday, June 24, 2004 ~ 9:09 a.m., Dan Mitchell Wrote: Mr. Chirac told other world leaders they should consider "a kind of international tax" to raise $50 billion dollars, the sum the United
Nations claims is needed to cut the world poverty rate in half by 2015. Mr. Chirac should be commended for trying to focus the attention on
world poverty, but if he really wants to raise $50 billion for that purpose we know just where he can find the money. Indeed, if he follows our recommendation -- to scrap the European Union's Common
Agricultural Policy (CAP) -- he will save that much and not even have to spend it on dubious U.N. foreign aid programs. ...CAP's combination of tariffs, price supports and export subsidies manages to
simultaneously raise food prices in the EU while driving down agricultural prices in the rest of the world. Those artificially lowered prices prevent non-EU farmers from competing with EU farmers on the
world market even as tariffs and quotas keep many countries locked out of the EU market. The result is that Third World farmers and the rural economies they support remain mired in permanent poverty. ...The last
in-depth examination of the global economic consequences of the CAP -- published in June 2000 by the London-based Institute for Economic Affairs -- found that the overall cost of CAP to the world is $75bn a
year, $49 billion of which is borne by the EU directly. ...The Chirac global tax idea is absurd, of course; income transfers usually don't even
give lasting relief to the people they are supposed to help. The taxation that finances them acts as a drag on the economy, essentially leveling
everyone downward. Instead of attempting to tax others to repair the damage the CAP is doing, a French-led "multilateral" campaign to cut tariffs and subsidies would be far more appropriate.
Thursday, June 24, 2004 ~ 8:29 a.m., Dan Mitchell Wrote: After four years of steady economic decline and stubbornly high unemployment, the so-called Lisbon Agenda has been sent to a
High-Level Working Group for review. ...Made up entirely of "representatives" from the groups that gave us the economic stagnation
and gridlock we see around everyday -- the trade unionists, anti-market NGOs and big business ...When our politicians talk about competitiveness, what they usually mean is more protectionist industrial
policy. How else can the newly appointed French Finance and Economics Minister Nicholas Sarkozy claim with a straight face, as he
did recently, that "it is not a right of the state to help its industry. It is a duty." No, Mr. Sarkozy, competitiveness means that you provide the
political framework in which entrepreneurship and risk-taking can flourish, not through state interventions but through the lack thereof. Competitiveness means moving away from national tribalism and
creating deserving champions based on merit, productivity and competitive prices. ...it would help Europe tremendously if we stopped dressing up our underperforming institutions with fancy names. Just
because a government body prides itself on defending the interests of competitiveness, innovation or enterprise doesn't mean that it is committed to making progress in any of these vital areas.
Thursday, June 24, 2004 ~ 7:56 a.m., Dan Mitchell Wrote: Commission Spokesman Jonathan Todd admitted June 23 that, if the Swiss hold a referendum and the agreement with the EU is rejected, the
EU cross-borders saving tax law will likely collapse. "I presume that the directive will not actually come into force if something happened between July 2004 and July 2005 which resulted in the savings tax
agreement not actually being applied in Switzerland," Todd said. "For example, if the Swiss parliament agreed to the accord but a referendum
was then forced and the Swiss public rejected the deal, then in that hypothetical situation the directive would not be able to come into force."
Wednesday, June 23, 2004 ~ 10:11 p.m., Dan Mitchell Wrote: Tax Freedom Day will finally arrive in Canada on June 28 this year, according to the calculations of the economic and social think-tank The
Fraser Institute. Tax Freedom Day is now calculated in most industrialised nations, and provides a simple reference point as to the true tax burden placed on citizens by their governments. In this case, it
effectively means that all income earned by Canadian taxpayers prior to June 28 was used to pay the government's tax demands at all levels: federal, provincial and local. For the average Canadian, Tax Freedom
Day has been steadily slipping over the last four years. According to revised figures from Statistics Canada and government financial information, Tax Freedom Day fell on June 25 in 2001, June 26 in 2002,
and June 27 in 2003. ...The figures contrast sharply with those of the United States, where taxes have been generally falling, and Tax Freedom Day fell well over two months earlier than in Canada this
year, on April 11.
Wednesday, June 23, 2004 ~ 5:42 p.m., Dan Mitchell Wrote: New Jersey is … falling into the same "progressive" tax trap that has done so much damage to California and New York. On Monday the
Legislature passed Governor Jim McGreevey's "millionaire's tax" (which actually kicks in at $500,000 of household income, but never
mind). The state's top marginal tax rate is set to rise by 41%--to 8.97% from 6.37%--and make New Jersey's top income bracket the fifth-highest in the country. Mr. McGreevey was elected pledging not to
raise taxes, by the way. …The Governor has proposed a $27 billion budget that's expected to pass and includes a 13% spending hike, the largest in state history. Mr. McGreevey is spending so much so fast that
he also plans to borrow at least $1.5 billion in addition to the tax increases. …Heavy reliance on income taxes from the wealthy is a notoriously unreliable way to fund government, and leads to revenue
booms and busts. Tempted by windfalls from high-income earners during the boom years of the late 1990s, politicians in California and New York spent without regard for the next economic downturn and
suffered for it later. The legitimate fear is that Mr. McGreevey is setting up New Jersey to repeat those mistakes. A recent New Jersey Chamber
of Commerce study said that, in 2001 and 2002, taxable income in the state fell by $9.62 billion, and "$9.5 billion of the fall came from taxpayers who had taxable income of $500,000"--Mr. McGreevey's
"millionaires." When the state's next budget crisis comes, we predict it won't be only "the rich" who pay.
Wednesday, June 23, 2004 ~ 11:40 a.m., Dan Mitchell Wrote: Whatever the media think about themselves, there is simply no denying that a high percentage of Americans perceive a liberal bias. ...This has
affected viewing habits. Conservatives have drifted away from those outlets they perceive as most biased, which has contributed heavily to an overall decline in viewership. Among all Americans, those who watch
the evening network news regularly have fallen from 60 percent in 1993 to just 34 percent today. Among Republicans, 15 percent or less report watching the evening news on ABC, CBS, or NBC. ...The conclusion of
the Groseclose-Milyo study is unambiguous. "Our results show a very significant liberal bias," they report. Interestingly, they found that the Internet's Drudge Report and "Special Report" on Fox News were the
two outlets closest to the true center of the political spectrum, despite being widely viewed as conservative. Groseclose and Milyo also look at
the political orientation of journalists relative to the population. They note that just 7 percent of journalists voted for George H.W. Bush in
1992 versus 37 of the voting public. This means that journalists are more liberal than voters in the most liberal congressional district in the
U.S., the 9th district in California, which contains the city of Berkeley. Even there, Bush got 12 percent of the vote, almost twice his support
among journalists. ...a key reason for the popularity of people like Rush Limbaugh is that they provide news and information not available elsewhere, not just conservative opinion. This helps explain why liberal
talk radio has been such a dismal failure. Listeners are not getting much they can't already get in the dominant media. In Prof. Mayer's words, "Liberals, in short, do not need talk radio. They already have Dan
Rather, Peter Jennings, and Tom Brokaw — not to mention NPR."
Wednesday, June 23, 2004 ~ 10:59 a.m., Dan Mitchell Wrote: …a General Accounting Office (GAO) report released this month reveals that bureaucrats in the Veterans Health Administration have
been using cards issued by Citibank to charge movie and baseball tickets, children's clothing, country club outings, expensive meals and even cases of beer to the taxpayers. …In 1994, says GAO, federal
charge-card expenditures were $1 billion. By 2000, 500,000 federal workers carried the card, using it to spend $12 billion. By 2003, card carriers dropped to 325,000, but spending jumped to $16.4 billion. That
is almost twice as much as government spent that year on the Legislative Branch ($3.4 billion) and Judiciary Branch ($5.1 billion) combined. When Clinton signed the charge-card law, he said it would let
federal workers "shop for the best deal without being bogged down in any bureaucracy." But GAO discovered the opposite is often true. "Dun
and Bradstreet's analysis of fiscal year 2002 Interior transactions, conducted on our behalf," said GAO, "illustrates that cardholders
frequently paid more than necessary." …But Clinton has been gone from office four years now. Isn't it time Republicans closed the charge accounts he opened in the taxpayer's name?
Wednesday, June 23, 2004 ~ 10:03 a.m., Dan Mitchell Wrote: European Union member states face the prospect of having to delay implementation of long-sought but controversial cross-border savings
tax legislation as Switzerland made it clear June 22 that it would be impossible to implement by Jan. 1, 2005, a parallel accord on which the
EU law hinges. As a result of the Swiss delays, Luxembourg--which, like Switzerland has a trillion-dollar banking industry built on secrecy laws--is threatening to further delay and possibly derail the EU
legislation if it does not receive assurances that it will not have to implement the law as long as the Swiss do not implement the parallel
accord. …"The longer we have to delay the greater the chances that the whole agreement could fall apart," the EU official added. Based on an
agreement reached two years ago, EU member states are due to decide by the end of June whether the EU cross-border savings tax law will take effect as of Jan. 1, 2005. That decision hinges on whether or not
third countries such as Switzerland and other independent territories, such as Liechtenstein, have agreed to adopt "equivalent measures."
…During the more than seven years that the current EU cross-border savings tax has been under negotiation in the Council of Ministers, Luxembourg, where many EU citizens hide their savings from high
taxes in neighboring countries such as Germany, France, and Belgium, has been determined not to give up bank secrecy if Switzerland does not. It was Luxembourg--along with Austria, which also has a form of
bank secrecy but nowhere near the banking industry of Luxembourg--that demanded the Swiss and the independent territories commit to equivalent measures.
Wednesday, June 23, 2004 ~ 9:28 a.m., Dan Mitchell Wrote: Turnout was down from its previous historic low, euro-skepticism was up, with skeptical parties across Europe winning around 10 percent of
the vote. ...Any normal organization would use these warning signals to reassess its priorities. If the public's response to ever closer union is ever
greater skepticism, maybe the next step should not be one in the direction of increased federalization. But the European Union is a bit like the alien behind the wheel in the film Starman: "Red light stop,
green light go, yellow light go very fast." And so, just a week after the Euroskeptic revolt, federal enthusiasts succeeded in driving the
European project closer to their end-goal of a United States of Europe by producing a written constitution for the EU. ...this treaty represents
a big missed opportunity. The historic chance, for instance, to cut the European bureaucracies down to size. Behind the scenes, most European negotiators agree that there is plenty of scope for reducing
the size of the EU's bloated civil service. The Dutch Foreign Minister Ben Bot admitted as much publicly in a recent speech at the Von Humboldt University in Berlin, when he called for the transfer back to
the member states of EU powers in the field of cultural policy, parts of the Common Agriculture Policy and the structural funds, health policy
and social affairs. Unfortunately, this treaty does nothing of the sort. It also misses the opportunity to block the creation of a number of new powers for the European institutions. The European Charter of
Fundamental Rights is a case in point. Its inclusion in the treaty could lead to the chaotic situation in which two rival courts (the European Court of Justice in Luxembourg and the European Court of Human
Rights in Strasbourg) issue competing judgments on similar legal questions. Its inclusion also gives the judges in Luxembourg further scope to interfere in matters that should really be decided in the political
arena.
Wednesday, June 23, 2004 ~ 8:31 a.m., Dan Mitchell Wrote: Three-term Rep. Jim DeMint trounced ex-Gov. David Beasley on Tuesday to win a Republican runoff in South Carolina and earn a spot
on the November ballot for a Senate seat that has been occupied by the same Democrat for almost 40 years. …With all precincts reporting in South Carolina, DeMint had 59 percent, or 153,947 votes, while Beasley
had 41 percent, or 106,113 votes. …The two generally sparred over trade issues and how best to revive South Carolina's manufacturing-heavy economy. DeMint supports free trade, while
Beasley is more of a protectionist.
Wednesday, June 23, 2004 ~ 7:12 a.m., Dan Mitchell Wrote: The removal of the taxation article in the constitution gained tentative approval when EU foreign ministers met June 15 in Luxembourg.
However, the issue was reopened at the summit of EU leaders at the insistence of French President Jacques Chirac, German Chancellor Gerhard Schroeder, and Belgian Prime Minister Guy Verhofstadt.
Chirac insisted June 18 that, without the articles on taxation in the constitution, the treaty "was watered down" and would not "serve the
purpose of establishing the proper framework for an enlarged" EU of 25 member states. The French president also accused British Prime Minister Tony Blair of being responsible for having the taxation article
removed. ...However, according to Ireland, there were a number of other countries, especially new member states from Eastern and Central Europe, that joined the United Kingdom in opposing the taxation
articles. "Even though the articles only deal with tax fraud, there were a number of countries concerned that believed this article was just a
way to open the door to QMV for other tax legislation," said Irish spokesman James McIntyre. Irish officials said the new member states hardened their position on the tax issue in the past month after
Schroeder accused them of using low tax rates to lure companies from Western Europe. "The consistent criticism from Schroeder seemed to bring a number of countries to the side of the United Kingdom on the
taxation issue," McIntyre said. ...The European Commission June 21 expressed disappointment at the failure of the taxation article in the
constitution. "It was simply a matter of dealing with tax fraud," said commission spokesman Jonathan Todd. "We feel that the position of some member states was exaggerated."
Tuesday, June 22, 2004 ~ 6:26 p.m., Dan Mitchell Wrote: Talks over financing the EU's budget from 2007 to 2013 are set to be "more difficult" than agreeing the Constitution, senior diplomatic
sources revealed today. ...And the seeds of a serious row over the EU's budget have already been sown. The European Commission has proposed large increases in the amount Member States must make
available to Brussels over the seven year period. But six Member States (the UK, France, Germany, Sweden, the Netherlands and Austria) launched a pre-emptive attack before the Commission proposals were
tabled, saying that the limit for payments should be capped at a lower rate than current levels. ...Mr Schönfelder [the German Ambassador to the EU] explained that Germany would have grave difficulties
explaining to their voters why the EU budget is increasing so much at a time when their own national budget had to be trimmed.
Tuesday, June 22, 2004 ~ 11:24 a.m., Dan Mitchell Wrote: ...a hedge-fund manager, personally knows all of his investors but he requires them to send him printed copies of their driver's licenses. His
last prospectus had 22 extra pages. He questions the destination of every wire transfer his fund sends. ...he wants to be careful he doesn't
run afoul of new regulations mandated by the Patriot Act. ..."It's ludicrous to do all this paperwork," said Harvey, who runs Hot Creek
Capital, a Reno, Nev.-based hedge fund... So far, the law's biggest impact has been on private-equity firms, mutual funds, brokerages and investment banks. ...they have not only been thrust into a new
regulatory cauldron. They have been plunged into an area full of confusion. "It was a political response to 9/11," Newcomb said, "with
little thought to the difficulties it posed and without a great deal of meaningful discussion." ...regulators, observers point out, have been
struggling with the law itself, and, as a result, have not brought any high-profile cases against industries new to money-laundering laws. ...some financial companies wonder if their new controls are bearing
fruit. It is common for financial companies never to hear back from the government on a suspicious transaction they report. Added Djinis, the
former Treasury lawyer: "There's been a great deal of frustration."
Tuesday, June 22, 2004 ~ 5:15 a.m., Dan Mitchell Wrote: Mr. Bush... [has] adopted a lot of the soft fatuities of the left - "Leave no child behind" - and he doesn't care how expensive they are to
implement. On Labor Day last year, Mr. Bush said: "We have a responsibility that when somebody hurts, government has got to move." With conservatives like that, who needs Sweden? It may be that there
are good sound arguments for federalizing education spending or creating a huge new prescription-drug entitlement, but, if so, Mr. Bush never makes them - or, to be more precise, he never bothers to place
these programs within any kind of coherent political philosophy.
Monday, June 21, 2004 ~ 5:10 p.m., Dan Mitchell Wrote: Prices have hovered around $2.00 per gallon for a month now, and next to the high price of oil, these regulations are the biggest contributor.
Federal rules have contributed to the nation's inadequate refining capacity by discouraging expansions at existing facilities and preventing construction of new ones. The last refinery was built in 1976. Other
measures have led to a hodgepodge of fuel specifications requiring more than a dozen different blends throughout the country. Overall, the federal regulatory costs may well exceed the federal gas tax of 18.4
cents per gallon. New rules, phased in this year, have brought this burden to an all-time high. ...Sens. Joe Lieberman, Connecticut Democrat, and John McCain, Arizona Republican, have co-sponsored
the Climate Stewardship Act ...the bill is still very costly. This includes an additional 13 cents per gallon of gas by 2010, and 29 cents by 2025.
And that's on top of the price impact from all the other regulations.
Monday, June 21, 2004 ~ 4:44 p.m., Andrew Quinlan Wrote: One of the most basic principles of international law is that a state cannot be bound by a treaty to which it is not a party. Further,
long-standing international legal norms hold that a state cannot be bound to legal assertions that it has specifically rejected. The ICC, however, directly contravening the norms and precedents of
international law, claims jurisdiction to prosecute and imprison citizens of countries that are not party to the Rome Statute and, more shockingly, over those who have specifically rejected the court's
jurisdiction. ...the ridiculous charges under Belgium's "Universal Competence" law against President George H. W. Bush, Secretary Powell, Vice President Cheney, and General Tommy Franks, among
others, for their roles in Operations Desert Storm and Iraqi Freedom - reinforce America's determination to protect itself from politically motivated criminal allegations. ...Unscrupulous individuals and groups
will seek to similarly misuse the ICC for politically motivated attacks. America is uniquely vulnerable to these kinds of charges... Since the
vast majority of the court's discretion lies within the Office of the Prosecutor, the ICC offers little opportunity to resolve these issues diplomatically and, because of its lack of appropriate checks and
balances to prevent it from being misused, represents a dangerous temptation for those with political axes to grind. Americans need more reliable protection than the goodwill and good judgment of an
international legal bureaucrat. ...
Monday, June 21, 2004 ~ 3:19 p.m., Dan Mitchell Wrote: In healthy American industries the real drama takes place in the scramble for market share. So it says a lot about the airline industry
that most of its excitement these days occurs in Washington, as with United's ongoing attempt to cadge a $1.6 billion taxpayer loan guarantee. ...The biggest villain here is Congress. The Members would
rather pass the buck to the ATSB than fix the regulatory and tax problems that have crippled U.S. airlines. It could amend the Railway Labor Act, which gives organized labor the whip hand in salary talks
with management. Or let carriers attract foreign capital the way other American businesses can; or cut the federal taxes and fees that take 26% of every $200 air ticket, or get out of the gate-distribution
business. It could even enact pension reform worth the name, allowing airlines to modernize their costly retirement plans. We sympathize with
United's plight, but the taxpayers shouldn't have to pay for Congress's failures.
Monday, June 21, 2004 ~ 2:57 p.m., Dan Mitchell Wrote: ...the opposition Democratic Party of Japan proposed a 3% consumption tax increase in order to prop up the country's ailing
pension system. Speaking on what is expected to be one of the key issues in the forthcoming election, the party suggested that increasing the consumption tax to 8% would prevent the pension system from
collapsing under the combined weight of a rapidly ageing population and declining birth rates.
Monday, June 21, 2004 ~ 11:39 a.m., Dan Mitchell Wrote: The Bush administration is opposing a provision in a US House bill that bars companies based overseas such as Tyco International Ltd. from
competing for Homeland Security contracts, saying it could violate World Trade Organisation rules and other agreements. "The pending legislation is overly broad and may have unintended negative
consequences," the White House Budget Office said in a statement. ...Companies based in the low-tax countries won $1.1 billion worth of defence and homeland security contracts in fiscal 2002, said
Representative Richard Neal, a Massachusetts Democrat who backs the contract provision. ...Tyco spokeswoman Gwen Fisher said the provision limits competition. The Bermuda-based company, the world's
biggest maker of security systems, industrial valves and duct tape, is run from West Windsor, New Jersey, and employs 100,000 people in the US.
"We believe decisions like this both affecting the safety and livelihood of Americans should be based on who can provide the best goods and services at the lowest price and should not be based on where the
company is incorporated," Fisher said.
Monday, June 21, 2004 ~ 11:23 a.m., Dan Mitchell Wrote: The United Kingdom's successful fight to retain a national veto on the issue of taxation generated a significant amount of friction
in talks on the European Constitution in Brussels last week, particularly with the French leader Jacques Chirac. British Prime Minister Tony Blair went into the talks after telling the House of
Commons last Wednesday that "there is no way we are going to have tax harmonisation or other people deciding on our tax rights." It was a position that angered the governments of
Germany and France who were dismayed on the lack of progress made in the talks between 25 European heads of state. "The ambitions foreseen [for the constitution] are reduced, especially
on tax and social security, by the clear position of one country, essentially the United Kingdom," commented President Chirac on emerging from the discussions last week. "I fear we will not be
able to progress as far as we should. And so we would hold back a Europe that could avoid being blocked by a single country," the French leader added.
Monday, June 21, 2004 ~ 10:26 a.m., Dan Mitchell Wrote: US Treasury Secretary John Snow told a conference last Thursday that the United States must continue cutting taxes and rolling back excessive
regulation and 'big' government if it is to counter the economic threat posed by emerging economies such as China and India. ...he also looked
back to the policies of the late Ronald Reagan as a blueprint for future tax policy. "Reagan saw that taxes were out of control, that government had grown far too much, like a weed that seems harmless
but can choke a tree – not intentionally, but due to its own growth," he told the audience, adding: "So Reagan took brave steps to cut taxes
dramatically, and continue the regulatory reforms of the 1970s…and these actions led to some of the greatest economic times our country has ever known."
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